Similarly, the dividend yield spread over the 10 year treasury yield has averaged 100 bps since the start of the modern REIT era, which compares to 180 bps today.
We found that when earnings yield spreads during the prior five years averaged more than two standard deviations above the average, investors on average earned (annualized) returns on stocks of 21.3% for the following year, 17% for the next two years, 14.6% for the next three years and 8.3% over five years.